Over the next two decades, municipal and retiring state workers are softening their pensions with overtime. According to a new study, it may cost New York taxpayers $32 billion to $54 billion.
The center for Cost-Effective Government crunched the numbers to project the economic repercussions, says the Monday report. It is because of public servants piling up overtime in the passive years of their careers.
Steve Levy, the executive director, said these obligations are a time bomb waiting for the explosion.
The size of a retiring worker’s pension usually derives from their three highest-paying years. Generally, it is the last three years of their careers. To inflate the rate by going out with a deluge of overtime, it’s common for senior employees.
A former Suffolk Country executive Levy said that the six-figure pension was an anomaly. But now it seems a norm for those retiring from particular unions.
The MTA, NYPD, and correction officers will be most probably the most significant burdens on taxpayers over the next twenty years. To pensions costs departing workers’ OT will most likely add another $5.69 billion, $2.65 billion, and $3.15 billion, respectively.
Under the New York State Employee Retirement System, the largest share belongs to workers. According to the review, it includes everyone from the State University of New York professors to state park rangers.
Over the next 20 years, NYSE members expect to have their pensions inflated by OT.
That is nearly half of the $32.91 billion. It’s a conservative estimate for the sum, says Levy.
According to Levy, the actual impact might be closer to $54.48 billion. Neither figure accounts for inflation.
The biggest drains are perfectly legal, though cases of alleged pension fraud do factor in.
Pensions: Samuelsen vs. Levy
Although, Levy says that illegal overtime is not the prime problem. The main problem is the overtime garnered legally from convoluted work rules and criminal contractual provisions.
The amount of OT for public workers hired after April 2012 covers 15 percent of their base salary.
It happens thanks to a state law passed in 2010. Levy called Albany to pass legislation stopping OT from factoring into pensions entirely. Levy added that those savings are likely to amount to too little and too late.
President of the Transport Workers Union John Samuelsen said that cuts to his constituents’ pensions were a non-starter. The presidents, members, include MTA workers.
Working people’s retirement security is continuously under attack. It is under attack ironically from the wealthy suburban lawyer who is out of public service for ethics violations, said Samuelsen referring to Levy. The Levy, by its side, agreed not to seek re-election opportunity because of alleged fundraising misuse.
Samuelsen added that Levy should give up his sector of public pension before he tries to target their sides’.
Nevertheless, the court never charged Levy has never with a crime. He said a dime does not inflate his $70,000 pension in overtime. Levy said no one could benefit from allowances without the belt-tightening.
All in all, Levy claims that he wants pensions to be for everyone. He added that everyone would take a haircut if the pension system collapses.